"Cortana is the first truly personal digital assistant who learns about me, and the things that matter to me most, and knows about the whole Internet," Belfiore said in a presentation.

Cortana responds to conversationally spoken requests or commands, using insights gleaned from calendars, contact lists, online searches and other smartphone sources to respond in a manner akin to a real-life aide, Belfiore said.

Cortana's voice and character is based on a popular artificial intelligence character in Microsoft's blockbuster Xbox console video game "Halo."

It comes as a long-awaited counter to the Siri virtual assistant on Apple mobile devices and Google Now capabilities in Android tablets and smartphones.

Cortana will be in a test, or beta, mode when it becomes available in a Windows Phone 8.1 software update, which is to begin rolling out in the United States in coming months.

The new version of Windows Phone 8.1 should be available on new phones beginning in late April or early May, according to Belfiore.

Microsoft met with real-life personal assistants while designing Cortana, which is powered behind the scene by search engine Bing, he said.

As do Siri and Google Now, Cortana can remind users of flights, appointments, birthdays, routes, or other information for managing lives.

"Imagine a real personal assistant, and the kinds of things you might ask to be organized," Belfiore said while extolling Cortana's capabilities.

After being tested in the US, Cortana will expand to Britain and China, and then other countries.

In a sign that Microsoft gave Cortana a playful side, Belfiore asked the virtual assistant to reveal the storyline of the next "Halo" game only to be told "I'm quite certain you don't have the proper security clearance for that information."

Wooing the app makers

Insights into updates of Windows software for mobile devices and traditional computers came as Microsoft wooed developers of the fun, hip, or functional applications that strongly influence decisions about what gadgets to buy.

Microsoft is also keen to entice business and consumers to remain faithful to its computer operating system -- the software platform on which the Redmond, Washington-based company's fortune was built -- as it phases out support for its much-loved but aging version Windows XP.

"We have a billion-plus PCs (personal computers) that will all be upgrading," freshly-minted Microsoft chief executive Satya Nadella told the gathering of developers.

"That is a significant opportunity for any application that targets Windows."

Nadella told the gathering of developers that Microsoft is "innovating in every dimension" to gain momentum in lifestyles increasingly revolving around mobile devices and services offered by computers in the Internet "cloud."

Software improvements were aimed at business, where Microsoft products remain strong, as well as at the booming tablet and smartphone markets.

Microsoft also used the stage to announced that Nokia will release a set of low-priced Windows-powered Lumia smartphones, starting in developing markets in Asia and India next month before gradually working its way to the United States in July.

The move takes aim at markets being overlooked and underserved, and breaks from trying to slug it out with Apple iPhones and Android-powered Samsung handsets in countries where buyers are more interested in high-end or medium-tier devices, according to Gartner principal research analyst Tuong Huy Nguyen.

"They really needed to move the price point of Windows devices down market, and this seems to be a step in that direction," Nguyen said.

"The US is essentially a two-horse market with Apple and Samsung; they have tried to push in with previous Lumia devices but it is hard."

Microsoft last year announced a $7.2 billion deal to buy Nokia's phone business and a patent portfolio.

Former Nokia chief Stephen Elop, now a vice president at Microsoft's devices division, said there was just "a short time to go" before the acquisition is completed.

Elop unveiled three new Windows-powered Lumia models during the opening of the gathering of application developers.

"In building an ecosystem, the appliction challenge is arguably our biggest challenge," Elop said at a Nokia press event late Wednesday. "That is the thing we really need to focus on."